Prime Minister launches Transparent Taxation- Faceless Assessment Appeal

Last Updated On: Aug. 29, 2020, 8:22 p.m.
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PM LAUNCHES TRANSPARENT TAXATION

E-assessment scheme was introduced by the government of India. The Government announced Transparent Taxation on August 13th 2020. The Honourable Prime Minister of India has launched the platform “Transparent Taxation”. The objective of this platform is to Faceless Assessment, Faceless Appeal and implement Taxpayer’s Charter. Faceless Assessment and Taxpayer’s Charter is implemented with immediate effect, the Faceless Appeal will be effective from 25th September 2020.

The government believes and acknowledges that India can move forward and develop the country when the life of the taxpayers are made easy.

Key Features of the Proposed Platform:

  • Three main pillars of the platform are faceless assessment, faceless appeal and taxpayer charter.
  • Faceless assessment will come into effect immediately. It aims to eliminate human intervention between the taxpayer and the Income Tax Department.
  • The taxpayer will not need to visit the Income Tax office or the officer
  • The taxpayer will be selected through advanced systems based on analytics and AI (Artificial Intelligence)
  • The faceless appeal will come into effect from 25th September 2020- the birth anniversary of Deendayal Upadhyaya.
  • Under this system, the appeals will be assigned randomly to any tax officer. The identity of the officer will remain unknown.
  • This system will eliminate the need for building relationships with taxpayer and tax offices
  • Taxpayer Charter will come into effect immediately. It earmarks the rights and responsibilities of both the taxpayers and the tax officials.
  • The focus of the platform would be to make the tax system people-centric and public friendly.

 

PROCEDURE OF FACELESS ASSESSMENT:

1. National e-Assessment Centre (NeAC) will serve a notice on the assessee u/s 143(2) specifying the issues for selection of the case for Assessment. 

2. The assessee may, within 15 days from the date of receipt of notice file the response to NeAC. 

3. Where the return of income is filed u/s 139 or u/s 142(1) or u/s 148 and notice is issued u/s 143(2) OR where the return of Income is not furnished in response to the notice u/s 142(1) OR has not furnished the return of income u/s 148(1) and notice u/s 142(1) has been issued by the assessing officer, the NeAC will intimate the assessee that assessment in the case will be completed under this scheme. 

4. The NeAC will assign the case selected to specific assessment unit in any one Regional e-assessment Centre (ReAC) through an automated allocation system. [ReAC is an assessment unit. There will be multiple regional assessment units set up and the case may be transferred to any ReAC) 

5. The ReAC can request the NeAC for

a) Obtaining such further information, documents or evidence from the assessee or any other person as it may specify.

b) Conducting of certain enquiry or verification by Verification Unit (VU)

c) Seeking Technical assistance from Technical Unit (TU)

6. Based on the specific request from ReAC, the NeAC will issue the appropriate notice or requisition to the assessee or any other persons for obtaining information or documents sought by the ReAC

7. The assessee or any other authorised person may file the response to NeAC within such time as may be extended on an application to NeAC by the assessee or any other person.

8. Where a certain request for enquiry or verification is made by ReAC then the NeAC will assign it to the Verification Unit through an automated allocation system.

9. Where any request for seeking technical assistance from the technical unit is made by the ReAC then the NeAC will assign it to the Technical Unit through an automated allocation system.

10. The NeAC will send the reports or response received from the assessee or any other person or received from Verification Unit or Technical unit to the concerned ReAC or the assessment unit.

11. Where the assessee fails to comply with the notice from NeAC or notice issued u/s 142(1) or direction issued u/s 142(2A), the NeAC will serve upon such assessee a notice u/s 144 giving an opportunity to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of its judgement.

12. The assessee shall respond within such time as specified in the notice or such time as may be extended based on an application filed to file his response to NeAC.

13. Where the assessee fails to submit the response within the time specified in the notice or within such extended time, then the NeAC will intimate the assessment unit (i.e. ReAC) about failure of the assessee.

14. The ReAC, after considering all the relevant material available on record, will make in writing a draft assessment order and send copy of such order to NeAC. The ReAC will provide the details of the penalty proceedings to be initiated.

15. NeAC will examine the draft assessment order in accordance with risk management strategy specified by the Board, including by way of automated tool and it may decide to

i) Finalise the assessment order and serve a copy of the order along with the demand order and notice for initiating penalty order if any.

ii) Provide an opportunity to the assessee in case any modification is proposed by serving a notice to the assessee

iii) Assign the draft assessment order to a review unit for conducting a review of such order.

16. The review unit may concur with the draft assessment order or suggest modifications to the draft assessment order and intimate NeAC.

17. The NeAC upon receiving the concurrence of the review unit either finalise the order or provide an opportunity to the assessee to respond.

18. The NeAC, upon receiving the suggestions for any modifications from the review unit, will assign the case to ReAC other than to unit which made the draft assessment order

19. The ReAC, after considering the suggestions made by the review unit will send the final draft assessment order to NeAC

20. The NeAC upon receiving the final draft assessment order will decide to finalise the order or provide an opportunity to the assessee to respond.

21. Where show cause notice is received by the assessee, the assessee may furnish his response to NeAC within such time or such extended time if any.

22. The NeAC, will

i)  in case where no response is received to the show cause notice to finalise the draft assessment order

ii)  in any other case, send the response received to the assessment unit. (ReAC)

23. The ReAC, after considering the response furnished will make a revised draft assessment order and send it to NeAC.

24. The NeAC upon receiving the revised draft assessment order

i) In case no modification is prejudicial to the interest of the assessee, finalise the assessment order or

ii) In case modification is prejudicial to the interest of the assessee, provide an opportunity to the assessee by serving notice

iii) The response furnished by the assessee shall be duly considered before finalising the assessment order

25. The NeAC, after completion of the assessment, will transfer all electronic records of the case to the Assessing Officer having jurisdiction over the said assessee for such action as may be required under the Act.

 

Voluntary Compliance:

The PM urged the taxpayers for voluntary compliance. He said the new platform is an initiative to make taxpayers “fearless” and tax collection “fairer”.  FM Nirmala Sitharaman called yesterday as “a landmark day in the history of tax administration.” She said the CBDT would devise an efficient system based on this new platform. This will realize the PM’s vision of empowering the taxpayers.

CBDT said yesterday that all income tax assessments (excluding certain cases) would be carried out under the faceless assessment scheme.  The aforesaid initiative to honour honest taxpayers has come after a sequence of steps by CBDT in recent times. Since September 2019, the CBDT has been undertaking a pilot project after the Finance Act of 2018 introduced the faceless assessment scheme. Subsequently, CBDT will issue an order stating that Income tax surveys would carry out with utmost accountability and responsibility.

It’s good to see the Government is extending its helping hand towards the taxpayers troubled by the ‘claws’ of the COVID-19 pandemic. Another noteworthy announcement which we discuss in this blog is about the celebration of festivals during COVID.

EXCEPTIONS:

The Principal Chief Commissioner or the Principal Director General, in charge of NeAC may at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case, with the prior approval of the Board.

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